Financial Accounting Report: Principles, Stakeholders, and Analysis

This report provides a comprehensive overview of financial accounting principles, focusing on their application within the context of Access Accounting Ltd. It begins with an introduction to financial accounting, defining its core functions and objectives, and then delves into the importance of financial reporting. The report examines the roles and interests of various stakeholders, both internal and external, in relation to financial information. It also covers fundamental accounting concepts such as the double-entry system, the preparation of bank reconciliation statements, the use of control accounts, and the utility of suspense accounts. The report includes detailed journal entries and a trial balance for Alexandra Study, demonstrating practical application of accounting principles. It concludes by summarizing the key aspects of financial accounting and its significance in business operations.

Financial
Accounting
Principles

Table of Contents
INTRODUCTION...........................................................................................................................3
REPORT..........................................................................................................................................3
CLIENT 1........................................................................................................................................6
CLIENT 2......................................................................................................................................15
CLIENT 3......................................................................................................................................17
CLIENT 4......................................................................................................................................19
CLIENT 5......................................................................................................................................20
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
Financial accounting in business context implies to collection of one or activities and
functions that includes classification of events and transactions, entering such financial events
and transaction, and providing relevant reports to management and stakeholders. Financial
accounting principles are set of rules and guidelines that provide a basic framework for
conducting activities concerned with processes of financial accounting (Kimmel, and et.al.,
2016). Adoption of financial accounting principle provides smoothness in entity's operations
which lead to enhancement in performance. Report defines financial reporting and its scope or
objectives, interest of different stakeholders in information generated through financial
accounting in context of Access Accounting Ltd, an UK's accountancy firm. The report also
presents recoding under double entry system, accounting concepts, reason behind preparation of
bank reconciliation statement, use of control accounts and utility of suspense account.
REPORT
Financial accounting mainly emphasises on preparation and presentation of annual
performance report and financial statement. Financial accounting combines tasks which are
relevant for business enterprise to know its actual position in market. There are many view about
financial accounting but core concept of it is to assess performance and report performance to
interested users and parties. As per R.N Anthony, “ Almost all business entities adopts an
financial accounting system which can be denied as functions of gathering, evaluating
classifying and presenting financial events for overall effective assessment of performance”.
Form this definition it is clear that financial accounting is core need of business and it includes
systematically management of financial information in order to achieve better accountability.
Financial accounting is covers all the business and financial operations of company which
contributes towards a detailed analysis of organisation's performance (Mirza and Ankarath,
2012). Accounting principles like GAAP is used by accountants under financial accounting in
order to make statements of performance of business entity. Accounting principles provides a
manner to record transactions and solve accounting issues in recording of transaction. Under
financial accounting accountants first collects information through bills, receipts and other
written or oral sources to record transaction in journal, then classify them as per their nature to
post them in relevant ledger account and at last prepare balance sheet, income statement and

other statements for reporting purpose. Following are purpose or main objectives of financial
accounting, in business context, as follows:
 Financial accounting provides information to increase in economic efficiency by assisting
in financial decisions.
 It generates information for both kind of stakeholders: internal and external.
 It develops a core base for preparation of income statement, statement of financial
position, analysis of cash flow and fluctuation in equity (Banerjee, 2012).
 It develop a framework for timely compliance of rules and regulations applicable for
business organisation.
 It assess the overall profitability, liquidity and financial performance of entity.
 It help in identification of new financial resources and effective utilisation of existing
financial resources.
Stakeholders:
Information of Financial accounting mainly generated for stakeholders. They are entity,
individuals, organisation and other parties who have power to influence or affect a business
entity and who are also impacted by acts of business entities. In simple language stakeholders
means to interested partiers or influencing/influencers parties. Stakeholders may be independent
or dependent as per their stake in any business entity, but mostly they are divided in internal
stakeholders and external stakeholders (Renz, 2016). Key stakeholders of an entity are owners,
investors, suppliers, management, employees, creditors or lenders, government, agencies etc.
Following is discussion on internal and external stakeholders, as follows:
1. Internal Stakeholders: Internal stakeholder are those stakeholders who are closely related
with business enterprise like board of directors, partners, management, employees, subsidiaries
etc. Here is brief discussion on business entity's internal stakeholders:
 Employees: Employees are key human resource and internal stakeholders for a business
entity as they directly assist company in achievement of organisational objectives by
applying their efforts, skills, knowledge, efficiency and experience. Employees having
interest in a business entity in terms of their benefits of employments, future growth in
entity and secure career (Collier, 2015). Business entities are also affects by actions of
employees as they determines the growth of company in market.

 Owners: They usually holds top position in a business entity as they are main founder of
organisation. Owners are internal stakeholder as they are real contributors in business
organisation. In listed company's context they hold stake in form of shares and securities.
They are responsible for taking key decisions of entity so most affected party by
organisation's performance.
2. External Stakeholders: External stakeholder are those stakeholders who are not closely
connected or outsider with business enterprise like statutory authorities, lenders, suppliers,
creditors, customers etc. They have more impact on organisation's performance as compare to
internal stakeholders. Following are significant external stakeholder of a business organisation,
as follows:
 Government: Taxes, duties and penalties are major source of government's revenues in
UK. Government collects information of business entities to collect duties and taxes.
They are external stakeholder of business entities as they are interested in profits of
company in order to collect different taxes. Business enterprises are influenced by
introduction of new regulations, rules and policies (Chambers, 2014). Government
monitors functions and decisions of business organisation to increase their revenues.
 Customers: Business enterprise growth depends on its customer base as they affects
organisation's sales and demand of products and services. Customers are external
stakeholders who are interested in organisation's products and services. A shift in
customers' preferences in relation to product or services of business entity can affect
turnover of company.
 Suppliers: Suppliers are provider of raw materiel and other essential items to business
entity for producing end product. They affects organisation's efficiency to fulfil demand
of product in market and sales of company in long run. They provide a credit periods to
business organisation so they always have concern about repayment of credits.
 Regulators and agencies: Regulators are responsible for controlling and monitoring acts
of corporates and other business entities. They are stakeholder of company as they are
concerned about company's performance and ethical compliances. They can affect
company's performance by introducing new policies and framework for operating
activities or functions.

CLIENT 1
1.1
Journal Entries and Ledgers in the book of Alexandra Study:
Date Particulars..... Debit Credit
01/01/19 Premises A/c....................................................................Dr. 240000
Motor Van A/c.................................................................Dr. 51250
fixtures A/c................................................................ Dr. 8100
Inventory A/c................................................................ Dr. 23900
P Mole A/c................................................................ Dr. 4400
F Lane A/c................................................................ Dr. 6100
Bank A/c................................................................ Dr. 68400
Cash A/c................................................................ Dr. 15600
To S Hood A/c 12150
To J. Brown A/c 16600
To Capital A/c (Balancing Figure) 389000
(Being Owner's Capital is calculated )
Therefore, Alexandra Study's Capital at 1st January
= £ 389000
Date Particulars Debit Credit
01/01/19 Storage cost A/c...............................................................Dr. 450
To bank A/c 450
(Being storage cost is paid)
02/01/19 Purchases A/c ................................................................Dr. 7680
To S Hood A/c 1450
To D Main A/c 2060

To W Tone A/c 960
To R Foot A/c 1610
(Being goods purchases on credit from various parties)
03/01/19 J Wilson A/c ................................................................ Dr. 1200
T. Cole A/c ................................................................ Dr. 1650
F. Syme A/c ................................................................Dr. 2100
J. Allen A/c ................................................................ Dr. 1020
P. White A/c ................................................................Dr. 2520
F Lane A/c ................................................................ Dr. 980
To Sales A/c 9470
(Being goods sold on credit to various parties)
04/01/19 Motor Expenses A/c …..................................................Dr. 470
To Cash A/c 470
(Being motor expense is paid)
07/01/19 Capital A/c................................................................Dr. 1500
To Cash A/c 1500
(Being cash withdrawal by owner himself)
09/01/19 T. Cole A/c................................................................ Dr. 680
J. fox A/c................................................................ Dr. 1310
To Sales A/c 1990
(Being goods purchase on credit with various parties)
11/01/19 Sale Return A/c............................................................. Dr. 680
To J. Wilson A/c 270
To F. Syme A/c 410
(Being goods is returned back by the parties

16/01/19 Bank A/c................................................................ Dr. 7020
To P. Mullen A/c 1400
To F. Lane A/c 3100
To J. Wilson A/c 850
To F. Syme A/c 1670
(Being Payment received from various parties)
19/01/19 R Foot A/c ................................................................ Dr. 50
To Purchases Return A/c 50
(Being Goods is returned to creditor)
22/01/19 Purchases A/c................................................................ Dr. 3740
To L Mole A/c 1830
To W Wright A/c 1910
(Being goods purchased on credit)
24/01/19 S Hood A/c ................................................................ Dr. 3600
J Brown A/c ................................................................ Dr. 4600
R Foot A/c ................................................................ Dr. 1400
To Bank A/c 6000
(Being payment is made to creditors)